2000 (8) TMI 1054 - HC - Companies Law

Summary

Issues:
1. Rejection of workers' application for rehabilitation scheme
2. Order directing winding up of the company based on BIFR recommendation
3. Dispute regarding procedural aspects of winding up

Issue 1: Rejection of workers' application for rehabilitation scheme
The appeal arises from two orders by a single Bench of the High Court, where the trial Judge rejected an application by workers of a company for a rehabilitation scheme. The trial Judge found the workers unable to establish a case for the proposed scheme due to lack of surety of funds. The alleged financier did not come forward, leading to the rejection of the application.

Issue 2: Order directing winding up of the company based on BIFR recommendation
Following the rejection of the workers' application, the trial Judge passed an order directing the winding up of the company. The official liquidator was instructed to take possession of assets and serve notices. The trial Judge based this decision on the earlier rejection of the rehabilitation scheme application and the BIFR's recommendation, deeming it necessary to wind up the company formally.

Issue 3: Dispute regarding procedural aspects of winding up
The appellant argued that the Court should not solely rely on BIFR recommendations but should independently assess the situation before deciding on winding up. Additionally, concerns were raised about fulfilling legal formalities like advertisements before winding up. The respondent contended that special laws, like the Sick Industrial Companies (Special Provisions) Act, prevail over general laws like the Companies Act in such matters.

The Court examined various judgments and legal provisions to determine the applicability of procedural rules in cases recommended by the BIFR. It was concluded that special laws take precedence over general laws, dispensing with the need for certain procedural aspects like advertisements before winding up. The Court emphasized the distinction between procedural and substantial aspects, affirming the independence of the Court's decision-making process. Ultimately, the appeal was dismissed, considering the special nature of the case and the prevailing legal principles.

*This summary provides a detailed analysis of the judgment, addressing each issue comprehensively and highlighting the key legal arguments and conclusions.*